“The greatest triumph of the banking industry wasn’t ATMs or even depositing a check via the camera of your mobile phone. It was convincing Treasury and Justice Department officials that prosecuting bankers for their crimes would destabilize the global economy.”

-Barry Ritholtz

I have the above quote in a piece by Dan Gross int he Daily Beast this week. The very next line (which did not make it to print) is “It was a license to steal, and its one they have exploited relentlessly.”

Dan goes on to add:

“From the beginning of the financial scandal, there has been a noticeable lack of criminal prosecution at the largest institutions. Yes, the Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York have cracked down on insider trading, and have sent scores of people to jail for illicit schemes that may have netted tens or a few hundred million dollars. . . . But that’s small change compared with the damage inflicted in the mortgage and LIBOR scandals.

A pretty clear rule of thumb has emerged: if you work at a well-known, large, systematically important financial institution, you may lose your bonus—but not your freedom. Simply put, authorities in the U.K., Switzerland, and the U.S. are not eager or willing to pursue banks to the fullest extent of the law. The trauma of the Lehman Brothers collapse has caused prosecutors around the world to treat banks with kid gloves. And that may be the greatest scandal stemming from the fall of 2008. (Emphasis added)

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

32 Responses to “The Greatest Triumph of the Banking Industry”

“See, it’s the highest honor they can give you. It means you belong to a family and crew. It means that nobody can fuck around with you. It also means you could fuck around with anybody just as long as they aren’t also a member. It’s like a license to steal. It’s a license to do anything.”

The vast majority will always vote for Stability. Stability is when the Big Banks have plenty of money to cash your check. Even Congress figured that out after the 300:1 letters against the first TARP vote in 2008. Enter Hank Paulson and the Stabilifiers: Act the First.

Regardless of Dan Grosss’ past,Barry,you’re exactly on the point ! Only the Reinstitution of Glass-Steagall with the addition of automatic Bank seizure upon bailout request coupled with automatic piercing of corporate veil,criminal liability,automatic personal wealth seizure of any and all benificiariers of systemic risk creators will do the trick ! For example,- if your bank overreaches it’s viability automatic and immediate enforcement of personal wealth loss ensues. The fear of total personal loss should do the trick nicely.
Make something like this the “cost of entry” if banksters wish to be banksters.No court,no arbitration -NO recourse of any kind. This should be the standard.

The biggest problem with gov enforcement is lack of Qualified personal that understand these financial products.

Regardless of Dan Grosss’ past,Barry,you’re exactly on the point ! Only the Reinstitution of Glass-Steagall with the addition of automatic Bank seizure upon bailout request coupled with automatic piercing of corporate veil,criminal liability,automatic personal wealth seizure of any and all benificiariers of systemic risk creators will do the trick ! For example,- if your bank overreaches it’s viability automatic and immediate enforcement of personal wealth loss ensues. The fear of total personal loss should do the trick nicely.
Make something like this the “cost of entry” if banksters wish to be banksters.No court,no arbitration -NO recourse of any kind. This should be the standard.

The biggest problem with gov enforcement is lack of Qualified personal that understand these financial products.

By the by Barry,we got 27 inches over here in Centerport in Huntington !

Regardless of Dan Grosss’ past,Barry,you’re exactly on the point ! Only the Reinstitution of Glass-Steagall with the addition of automatic Bank seizure upon bailout request coupled with automatic piercing of corporate veil,criminal liability,automatic personal wealth seizure of any and all benificiariers of systemic risk creators will do the trick ! For example,- if your bank overreaches it’s viability automatic and immediate enforcement of personal wealth loss ensues. The fear of total personal loss should do the trick nicely.
Make something like this the “cost of entry” if banksters wish to be banksters.No court,no arbitration -NO recourse of any kind. This should be the standard.

The biggest problem with gov enforcement is lack of Qualified personal that understand these financial products.

By the by Barry,we got 27 inches over here in Centerport in Huntington !

I have a number of friends that were sub-prime traunche creators at Citi among others.They didn’t even know or think thier products would explode.

My suspicion now is only a bank size reduction and much deeper finance product viability analysis must be excercised.
Additionally,lack of ethics,integrity even,consciousness is the daek root here.How do we impliment these ? I suspect only accomplished by emptiing board members wallets upon rougue outfits.

To understand why bankers get a ‘free pass,’ it helps to observe the power bankers have over politicians. The banks influence politicians at all levels, from the school and sewer districts, municipalities, states, up the federal government. Bankers have the ability to deny or limit loan funds one needs to purchase a residence or build up one’s successful business. Bankers have the ability to raise and lower one’s expense by setting the rates of interest paid. Bankers have the ability to regulate one’s liquidity by setting loan payment dates. Competition among banks is small, as they are very cozy with another, communicating on friendly terms with competition at all levels. Why else do they raise and lower prime rates in unison? Bankers have private information on every customer, which they can share with others, one’s competitors, creditors, etc. without one’s knowledge. And, what is worse, bankers are gutless bastards who can’t start and run a business themselves, but have the ego to tell others how to run their businesses. They would rather non-productively live off the sweat of others. Their power makes them think they are smart. The Democrats get all kinds of ‘favors’ out of bankers, from cozy loans, to forebear from collecting loans, to ‘free’ checking, jobs for close and distant friends and relatives. Banks are a powerful semi-underground political force and bankers should be exposed to the light of day at all levels. For example, they could be compelled to publish their relationships with politicians etc. The banking industry, for the most part, always gets its way. Check it out.

Watch the documentary on Eliot Spitzer and then think of who would want to take on the financial titans. Spitzer gave them the ammo but who is squeaky clean enought to stop the Langone’s, greenberg’s and stone’s of the world. In Spitzers case they even had the DOJ helping. His demise was not lost on the present officeholders.

I cannot find the link, but mid level Wall St and TBTF bank managers being interviewed by Senate investigators were being told that the fraud and corruption would continue until CEOs were sent to jail. Once CEOs went to jail, all the BS would stop practically overnight.

Great quote -and a fine example of creative destruction
“The greatest triumph of the banking industry wasn’t ATMs or even depositing a check via the camera of your mobile phone. It was convincing Treasury and Justice Department officials that prosecuting bankers for their crimes would destabilize the global economy.”

We have a banking system that is consistent with economic fascism. Why would you expect anything else?

Banking is and has been heavily regulated and subsidized for decades. The rating agencies are govt-mandated oligarches. There isn’t even the veneer of free market to anything having to do with money and banking in the US or any other country.

I created my own bailout starting in 2008 and got way more out of the TBTF banks than anyone else I know. I’m not sure a public forum is the right place to share it all, but I’d love to chat with you BR and tell you what I did and how I got the best of them…and then some, beating the banks at their own dirty game, repeatedly…

I feel that most commentors in this forum are in the 5% of IQ. But when it comes to politics and society most are very naive.

I am surprised nobody proposed an opposing view, are we sure the world is all black and white?

You guys think that any elected officials top priority is making a better system, really? this is the root problem, and as of now its impossible to fix it since more than 60% of the people think being christian is the top priority for a person running for office.

He did not complain in any way about the bad reputation he enjoyed all over the world, assured me that he himself was the person the most interested in the destruction of superstition, and admitted to me that he had only been afraid for his own power one time, and that was the day when he had heard a preacher, more subtle than his colleagues, shout out from the pulpit:

“My dear brothers, never forget, when you hear the progress of enlightenment vaunted, that the devil’s best trick is to persuade you that he doesn’t exist!”

Nice article but IMHO, the #1 spot goes to the Banksters who convinced (or bribed) the Mortgage Insurers (and the Government) that the Banksters got KEEP the title on, and RE-SELL the foreclosed homes which they had been PAID OFF for….Normally with insurance when a thing is totaled-out and the claim is paid it’s the Insurer paying the claim who gets to keep the title.

~~~

BR: Do you have some sourcing on this? I’ve never heard of that.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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